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November 20, 2012

CHICAGO — If you happened to miss a story along the way, then you might appreciate this brief recap

CHICAGO — American Coin-Op covered a variety of topics this year. If you happened to miss a story along the way, then you might appreciate a brief recap. Here’s a quick look at some of the more informative articles presented this year.

BUILD NEW OR REHAB?

When considering opening a new coin laundry, do you build from the ground up or look at rehabilitating an existing store? Setting your laundry apart from the competition has to be at the heart of the decision-making process, says Scott Equipment’s Carl Graham.

When building new, you can start from the ground up to create a clean, modern infrastructure so it can handle the laundry equipment you plan to install, says National Laundry Equipment’s J.D. Dixon. And you can eliminate any concerns about infrastructure issues with new construction. Choosing to rehab a store means you're locked into that location, while building new gives the prospective owner the flexibility to select the best site for his/her business needs.

New construction provides the opportunity to design a store that is highly efficient and thus equipped to get customers in and out in the shortest time possible. But what works in one store may not work in another. For example, you might choose a color scheme for a Miami store that you wouldn't for a store in Lexington, Ky.

Building new also means a much more extensive project than a rehab, taking on greater financial risk, plus it's generally more expensive.

When choosing to rehab, consultant Robert Renteria favors repairing any machines that still have useful life, then looking to buy rebuilt or refurbished machines.

Buying and rehabbing an existing laundry can save the new owner some expenses, and may allow them to avoid bureaucracy such as impact fees and code restrictions. Another benefit for choosing to rehab an existing laundry is that it already has a customer base. With a new store, you must build that customer base from zero.

LAUNDRY FURNISHING OPTIONS EXPAND

The general structure of chairs and tables typically found in coin laundries today really hasn’t changed much in recent years, but the palette of colors and textures that are available has become quite expansive, according to some manufacturers of such furnishings.

CACO Mfg. has been making Sol-O-Matic© fiberglass seating and folding tables for coin laundries since 1960. CEO Randall Chaffee says his company can now create granite-type finishes commonly seen on countertops.

High Mark Mfg.’s high-pressure laminate furniture is available in more than 500 different colors, says President Peter Valconesi, whose company produces fiberglass and laminate furniture, both standard and custom in design.

RJ Papalini is celebrating its 50th year of manufacturing furniture for the industry. The customer is accustomed to seeing coin-ops utilize bright color schemes to attract customers, but President/CEO Richard Pennington says he’s seen that trend change in places “that are not quite as economically challenged.” Operators there are looking for softer colors, browns and earth tones.

Any time spent discussing coin laundry décor will be wasted if the furniture selected doesn’t stand up to the rigors of laundry life. Resist the temptation to purchase residential-grade chairs or tables from a retailer or home improvement store, because that’s just a short-term solution. “We see it all the time, but two or three years later, they come back to us because that stuff just doesn’t hold up,” Chaffee says.

CRITERIA FOR SETTING PRICE

Upon what criteria should a laundry owner base his or her wash and dry vend prices?

“It really comes down to two issues,” says Kevin Hietpas, vice president of sales and marketing for Dexter. “No. 1 is what’s happening to his costs. How have costs impacted the viability and profitability of his business? Owners should have a good sense of where their business is tracking from a performance standpoint. No. 2 is where is he competitively.”

A store owner needs to be aware of and factor in the competition’s prices when determining his or her own pricing, says Kent Walters, national sales manager for Maytag/Whirlpool Commercial Laundry. “The owner’s goal should be to produce the best experience for the customers, from ambiance to equipment to services—and the costs associated with washing and drying play a large part in this equation,” he says.

While customers may not react warmly to a price change, they will understand if you explain the reason behind the change, such as higher utility rates. Hietpas believes that customers are more sensitive to how long it takes and how much it costs to dry than to small changes in wash prices.

Vending technology has enabled owners to change prices on equipment easily—during slow hours or days, for example—but avoid changing prices too often, as the practice can turn off customers.

BECOMING A MULTI-STORE OWNER

When you’re thinking about opening a second store, it’s important to go back to the basics and look at everything from location to equipment and store naming, advises Pittsburgh Laundry Systems’ Sonny Rogalla.

Carve out an area of no more than an eight-mile radius from your original store and use that as your market. Having your stores in close proximity—no more than 45 minutes from each other—allows you to easily more between stores.

Make sure to continue cultivating your relationship with the distributor that assisted you in building your original store. Distributors typically have information on existing Laundromats coming up for sale and will approach you to judge your interest. And the distributor can easily identify whether a laundry is a potential good investment.

Whether rehabbing a store or building one from the ground up, rely on what you’ve learned from your first store. You already know what works—now it’s time to make it even better. Look at the machines your distributor offers; there are probably new advances since you last purchased equipment. It may also be time to look at investing in advanced controls if your previous store doesn’t have them; these controls can be a great resource for multi-store owners.

Financing through a laundry manufacturer is better than using a bank, Rogalla believes, because manufacturers understand the industry better and can tailor a financial solution to meet an owner’s needs.

ONE LITTLE IDEA AT A TIME

Little changes over time can make a difference for your business, advises columnist Howard Scott. Here are a number of little ideas he’s seen in different Laundromats, or been told about, or that just popped into his head:

  • Hang a purple neon sign in your window
  • Put a sandwich board sign on your front sidewalk
  • Announce that you offer high-quality equipment
  • Place a wooden bench out front
  • Sell three sizes of laundry bags
  • Offer a deal for wash-dry-fold service
  • Hang a large clock in your store
  • Give machines names, not numbers
  • Sell a value card
  • Paint a mural on your exterior side wall
  • Set up a glass display of your merchandise for sale

TRACKING ENERGY EFFICIENCY

The specter of ever-rising utility costs should be enough to spur the average laundry owner to track this expense and explore ways to minimize it. Owners looking to determine their store’s level of energy efficiency need to compare the cost of utilities vs. revenue, says Maytag’s Walters.

If the store’s utilities cost is above the industry average of 20-25% of total revenue, the owner should look for ways to decrease this cost, starting with equipment. Look in the washer-extractor control software, Huebsch’s Gary Dixon advises. Are the water levels set where you wanted them? Is the water temperature different than where it was? Is the software notifying you of potential leaks?

Walters says the first place a store owner should investigate is the dryers. “Specifically, an owner needs to ensure all ventilation is free of lint, which can cut down on the amount of air getting to the dryer, as well as make-up air.”

Store owners who want to maximize equipment performance must regularly perform proactive and preventive maintenance tasks. “By following a recommended maintenance schedule, the laundry owner is ensuring that their equipment is operating at optimum efficiency,” Dixon says. “This translates to lower utility costs and keeps downtime to a minimum. The result is happier customers and more profit.”

EXTRA CREATIVITY, EXTRA PROFIT

Extra profit centers provide a variety of additional revenue opportunities, and some require little extra work from you and your employees, says Todd Santoro of Clean Wash Laundry Systems. Try partnering with a local dry cleaner. Establish a program where customers can drop off at your location for both services; work with the cleaner to determine the timeline and revenue split.

Pick-up service is another way to adapt wash-dry-fold to suit your business. Set a delivery radius around your store, up to 20 miles, and charge per pound to accommodate the increased costs. Pick-up is particularly important for growing your commercial laundry revenue to include clients such as spas, catering companies and salons.

Ancillary profit centers allow Laundromat owners to be creative with their offerings. An example is offering U-Haul trucks for rent. Store owners receive commission from the rentals, and attendants also set up reservations for other locations, which also nets owners a percentage of the rental.

There are many other services that a laundry can offer, but remember, consider your target demographic. Services that are quick and helpful will best serve them and you.

 

To read the original stories in their entirety, click the following:

Store Creation: Build New or Rehab? (Part 1)

Store Creation: Build New or Rehab? (Part 2)

Trends in Laundry Furnishings

Coin Laundry Pricing Strategies (Part 1)

Coin Laundry Pricing Strategies (Part 2)

Coin Laundry Pricing Strategies (Part 3)

Expanding Your Business: How to Become a Multi-Store Owner

Grow Your Laundry One Little Idea at a Time

Energy Efficiency: Battle Against Rising Costs Often Starts with Equipment (Part 1)

Energy Efficiency: Battle Against Rising Costs Often Starts with Equipment (Part 2)

Extra Creativity Can Lead to Extra Profit (Part 1)

Extra Creativity Can Lead to Extra Profit (Part 2)

May 29, 2012

NEW YORK — Do you know what people are saying about your laundry business?

NEW YORK — People are talking about your laundry business. Do you know what they’re saying?

The answer can spell the difference between success and failure. Positive reviews on Internet message boards help boost revenues and fatten your bottom line. Negative reviews can spike your best business plans.

“People are increasingly putting reviews online as the Internet becomes more social,” says Daniel Burrus, a business consultant based in Hartland, Wis. “All of the reviews are in the cloud and available for anyone to read.”

And read they do: For many businesses, social media are quickly becoming the best sources of new customers. Just a few of the most popular sites are Yelp, Twitter, Angie’s List, Facebook, LinkedIn, and YouTube. A recent study from Harvard Business School revealed a direct correlation between star ratings on Yelp and revenues at a business.

Why the upturn? A big reason is technology’s growing heft. “Our main computing device is shifting from the laptop to the smart phone,” says Burrus. “And unlike our laptops, our smart phones are always with us.” Smart phones are constantly getting faster at processing data. That helps people quickly post reports on their business experiences while searching for the most highly ranked providers of goods and services.

WATCH THE SITES

Watching for reviews about your laundry business on social media sites poses a challenge. Monitoring them all would take a lot of time, and time costs money.

What to do? Set up an automated search to alert you whenever your business is reviewed. Google offers the most popular of such alerts. “Google Alerts are easy and free,” says consultant Bob Phibbs, Coxsackie, N.Y. “You can create an alert that sends you an e-mail every time your business name is mentioned online.” If such alerts are too numerous, you can specify that Google send you a consolidated report once a day. (Google Alerts is at google.com/alerts).

You should also set up an alert in Twitter to let you know when your business is mentioned in a Tweet. Twitter is especially important for your online reputation because people with smart phones use Twitter all the time. Your customers are most likely already using Twitter, and you want to pay attention to what they say. (For information, go to twitter.com/alerts.)

Bonus tip: Ask your customers what Internet sites they use to find businesses like yours.

RESPOND TO NEGATIVE REVIEWS

Every business will get some negative reviews. “People gripe for a lot of reasons,” says Phibbs. “Maybe they did not get waited on fast enough, or maybe a coupon expired and you didn’t honor it.”

When your business receives a negative review, it’s important to respond with an online message that prospective customers can see, says Phibbs. “Posting a response shows you are listening to your customers and taking action.”

Avoid impersonal or canned posts. Compose your posts in words that directly address the complaining customers’ concerns, suggests Phibbs. “Personalize your message with words such as ‘I own the business with my wife Mary and we are sorry to hear you had a bad experience.’”

Your responses should also note that you are attempting to improve whatever areas the customers found lacking (cleanliness, customer service, employee friendliness, etc.). “Finally, invite the customer to contact you,” says Phibbs. “Include an e-mail address or phone number.”

Carefully written responses can turn a negative situation into a positive one. Paying attention to customers and taking action on complaints can build loyalty. You can even turn an angry person into a raving fan.

From time to time, you will run into a review that, while legitimate, comes from a customer who is simply being unreasonable. “You often have outliers on the negative side, because the unreasonable customer can be very vocal,” says Greg Sterling, a San Francisco-based Internet analyst.

“While most consumers are reasonable and will look at the consensus and not ascribe too much weight to a single negative review, it still has to be addressed,” says Sterling. Post a response in terms that illustrate the importance you place on the area the customer has addressed. Emphasize that you intend to do better in the future.

Bonus tip: Look at negative reviews as informal customer surveys that help you identify and rectify business problems.

HANDLING ILLEGITIMATE REVIEWS

Social media have their dark side: Not all negative reviews are legitimate. What do you do if you suspect a negative review has been posted by a competitor, or by a disgruntled former employee?

One thing not to do, says Burrus, is stir the pot. “Don’t create a fight and don’t incense people in ways that make them do more negative things.”

Stay positive, even in the face of unfair practices. “If the poster is a competitor, post some evidence to the contrary underneath what they wrote,” suggests Burrus. “You might say something like, ‘Here is a link to 50 customers who disagree with you.’”

And what if the poster is a former employee? “Have your lawyer contact the person to let them know they must cease and desist,” suggests Burrus. “Let them know they cannot smear a reputation without ramifications.” A legal letter can convince the person to remove an offending review.

The challenge is even greater for sites that allow anonymous postings. If a review is blatantly unfair (for example, a personal attack on an employee), you can contact the site and ask that it be removed.

Finally, there are the gold diggers. “Some people will give you bad reviews in hope that you will contact them with deals such as half off a future purchase,” says Phibbs. Don’t take the bait. Instead, post a reasonable response that conveys the actions you are taking to provide quality service.

RESPOND TO POSITIVE REVIEWS

Your good business will likely get a lot of positive reports. “It is just as important to respond to good reports,” says Phibbs. A simple “Thanks so much for the compliment” may do for a general report, but take time to address any specific topics the customer has mentioned. (It’s not necessary to respond to every favorable report once you start getting more than a handful).

Phibbs suggests printing good reports and posting them on the wall in your store, perhaps under a headline such as “Raving Fans of Our Business.” Copy them to your website and to your Facebook page as well.

Bonus tip: Don’t be afraid to ask people to post good reviews. But avoid offering rewards for doing so: Websites frown on that practice.

MONITOR YOUR REPUTATION

Google Alerts, as already mentioned, is a great service for getting a heads up on the lowdown. But you may want to invest a little more time and effort into managing your reputation. That’s where online reputation tracking services come in. “Most small businesses don’t know about the many online reputation tracking services, and just search their business names once in a while,” says Sterling. “Yet the specialized services can give you important information.”

You can have reviews sent to your mobile phone and have message threads with negative reviews tracked in real time, giving you granular control over responses. This can be particular helpful when damaging disputes break out about your business. In contrast, says Sterling, e-mails from Google Alerts do nothing more than inform you that a post has been made, and even that information arrives after a time lag.

Be aware that Yellow Pages and newspapers may include reputation-monitoring tools in advertising packages. That can reduce your costs considerably.

SUGGESTION BOX

Maybe reputation monitoring seems like more trouble than it’s worth. Keep in mind, though, that your business is at stake: More people than ever are turning to online reviews for help deciding what business to patronize.

Indeed, every online review site is a valuable suggestion box for your business. “There is a great deal you can learn from reviews,” says Sterling. “They can help you think of new products and services for your customers. Be open and embrace them.”

February 4, 2010